TIRANA – The European Commission (EC) said on Wednesday it expects Albania’s economy to shrink 4.8% in 2020 due to the coronavirus pandemic, and rebound to 4.2% growth next year, reported SeeNews.
Albania’s economy is expected to contract as restrictions at home and abroad will depress private consumption and tourism, on which Albania strongly relies, and the recession in the EU will affect remittances and FDI inflows and put pressure on the current account and the exchange rate, the EC said in its Spring 2020 Economic Forecast.
Albania’s fiscal deficit is seen rising above 5% of GDP, whereas public debt is projected to increase temporarily to about 75% of GDP. The public debt-to-GDP ratio stood at 66.3% at end-2019, the EC recalled.
Private consumption and investment in Albania are projected to drop by 4.3% and 7% respectively. Public consumption is expected to grow by 5.5% this year, according to the Commission.
The rate of unemployment is projected to rise to 14.9% in 2020 from 11.6% last year.
The inflation rate is expected to accelerate to 2.5% from 1.1% in 2019.
The positive GDP growth projection for 2021 is subject to uncertainty about the length of travel restrictions and the resilience of enterprises during the crisis, the report notes as quoted by SeeNews.
